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Upton-on-line: NZ General Election Special Issue

Upton-on-line - Diaspora Edition

2nd August 2002

NZ General Election Special Issue

In this issue

…upton-on-line reflects on the consequences of the 2002 NZ General Election for the centre-right of politics. (Results table on last page)

Disclosure of interest: that Simon Upton is a member of the NZ National Party is a matter of record. If it wasn’t, it would certainly be one of his worst kept secrets. That said, upton-on-line is not a cheer sheet for any partisan gathering. What follows are some preliminary thoughts by a centre-right voter living in what is the electoral equivalent of Mars.

A political landscape filled with interest (unless you happen to be living in the bottom of the gullies in which case it is a landscape filled with horrors)

The recent election has transformed the political landscape in a way that promises abundant opportunities for analysis, conjecture and myth making. There has already been extensive domestic commentary (most acutely from the indefatigable Colin James). Upton-on-line, having missed all the interviews, audience approval ‘worms’ and political ploys, would not dare to offer any verdicts from his satellite orbit (which is what observing the election from Paris has felt like).

The accepted wisdom seems to be that Helen Clark’s performance and positioning of Labour has given her peerless mastery of the MMP landscape. (As a former co-conspirator with Clark in the then-doomed pro-FPP campaign of the mid-nineties, upton-on-line had harboured a sneaking hope that she might pull off her quest for an out-right majority, thereby winning a mandate to re-open the debate on electoral reform. That now seems as dead as the Dodo).

Those who claim Clark failed by winning ‘only’ 41% of the vote miss the point. It’s more than enough in MMP and her timing was deadly for National. The Labour Party both in government post-1987 and again during Clark’s years in Opposition experienced opinion poll plunges that caused dismay. (Upton-on-line recalls one poll that had Labour at 16%). Clark knows just how devastating that can be for morale. Going to the polls early when National’s support was soft maximised the chances of a downward spiral for National – and it worked.

Beyond Labour, the picture beamed back by remote sensing is one in which all parties seem to be more or less bathed in sunlight – particularly Peter Dunne’s United Future Party and Winston Peters’ NZ First. The exception of course is National, which can only be dimly picked out in the gloomiest gullies. Upton-on-line can offer neither a comprehensive nor an inside analysis. But as a gully-dweller he can offer some ideas on what might be at stake in the centre-right of New Zealand politics.

[Diaspora readers can find a table of the final percentages at the end of this edition: the official results can be found at]

The end of the broad church hegemony

One of the best-written pieces upton-on-line has come across is that by Michael Bassett in the Dominion earlier this week. For those not fated to awake to its pages each morning here are some key extracts. Having outlined the thinning out of Labour’s support base, Bassett devotes the bulk of his analysis to National:

National's church, on the other hand, always accommodated a more diverse congregation. Throughout its history, farmers rubbed shoulders uneasily with businessmen and upwardly mobile urban professionals. Issues like tariffs and protection usually divided them. With the arrival of MMP a few took the opportunity to join ACT or the Christian parties, but enough supporters remained faithful to make National strategists hesitate to redefine the party's position on MMP's political spectrum. As a result, National's church contains as many pews as ever, but there are fewer bottoms on them, as was clearly evident at Bill English's opening.

National is still searching for a coherent identity. The threat posed by the First Labour Government drew various defenders of private enterprise to National's 1936 conference. It took time for the new party to settle down. But eventually it adjusted easily to the welfare state in the 1950s and 1960s. Hosts of fair-weather friends turned subsidies and regulations to their own ends under Sid Holland and Keith Holyoake. They padded out National's huge party membership; it bestowed both status and opportunities upon them. Between 1949 and 1972 National was the dominant political religion in New Zealand, ruling for all but three years.

However, when Britain joined the Common Market and European agricultural policies squeezed out New Zealand's produce, our economy slowed then went into reverse. Robert Muldoon's regulatory sermons started grating on worshippers. As he subsidised, regulated and fine-tuned like never before, growing numbers sidled out the church door. More exited over the Springbok Tour, handing three Wellington seats to Labour in 1981. The following year, free enterprisers like Bob Jones bolted over the Wage-Price Freeze, labelling Muldoon the country's leading socialist. Some heretics returned to National in 1987 and 1990, but the party's ranks thinned to 35% of the vote in 1993. Three elections later they are thinner still. Jim Bolger, Jenny Shipley, and now Bill English have exhorted them to come home. They show no inclination to do so…

The cold hard reality of MMP is that it is designed for niche sects, not broad churches…

All this seems reasonably compelling. The interesting question is whether Bassett defines the right niche. Here is his prescription:

This is crisis time for the Nats. Before they can attract back their lost congregation they will have to define their niche within MMP, and sharpen the message. Make no mistake, there is a place in the market for policies based on National's core free-enterprise principles. Moreover, there are enough bewildered voters milling around to respond to solid leadership and credible policies. This is a conservative country not given to socialist experimentation, and voters will always be on the lookout for a steady, reliable political vehicle. Why else Peter Dunne? Either National engages in very tough soul searching and puts everything up for discussion, including the leadership, or it will end up like the old Liberal Party which finally gave up the ghost in the 1930s, its last few parishioners straggling across to National in 1936. Saturday night was either a new beginning, or the beginning of National's terminal phase.

The problem with this is the reference to National’s “core free-enterprise principles”. In truth, this is not where the National Party’s core lies (although it has embraced such principles much more forthrightly since the mid-1980s – in common with virtually every political party in the democratic world, more or less). The National Party’s core lay in it’s being an anti-socialist party, not a free enterprise party. The market liberalism that Roger Douglas unleashed after 1984 (supported by Michael Bassett among others) was as alien to National as it was to Labour. Its standard bearer today is the ACT party (bringing together as it does an amalgam of personalities from Labour and National like Ken Shirley and Roger Douglas, Derek Quigley and Ruth Richardson).

A detour into political theory [which may be avoided by the faint of heart]

It is the cross-party reach of the market-liberal agenda that has fooled so many commentators into believing that the same agenda must therefore represent a broad church. The evidence is, that in its undiluted form its following is no wider than root-and-branch social democratic egalitarianism. Why is that? Upton-on-line is not a newsletter devoted to applied, amateur political theory. But some observations may not go amiss. Market liberalism as it struck New Zealand in the 1980s came in a fairly undiluted form with one over-riding (though often unspoken) justification: government failure. There was abundant evidence to support it amidst the wreckage of the Muldoon era. For most people, the empirical evidence was good enough. But those moved to identify a theoretical premise with which to explain government failure would rapidly have stumbled across the epistemological scepticism of the celebrated Austrian economist, Hayek.

Hayek’s hugely powerful insight – dating back to the middle years of the twentieth century – was that even if you wanted a government to take command of the economy (and it was an era in which the twin stimuli of Soviet totalitarianism and war-time emergencies in the West provided plenty of advocates), it simply could not assemble the information necessary to replicate the trial and error experimentalism of dynamic markets. Planned economies would always under-perform over time. In terms of economic planning, Hayek’s verdict has been not just vindicated but amplified in the face of all-pervasive communications technologies that can easily outstrip even the most ruthless centralised bureaucracy or pared-back democratic decision-making apparatus.

But scepticism alone is not a basis for public policy and a variety of other pieces of machinery have been bolted on to Hayek’s core insights to provide them with a more ideological skeleton. In America, rights theories have buttressed Hayekian scepticism: not only do governments get lots of things wrong, but citizens possess rights – both personal and in respect of property - that make it not just unwise but unjust for governments to commandeer resources.

In a nation such as the USA, forever trapped within the prism of a founding constitution that gives primordial status to such rights, the alliance of ideas is doubly potent – witness the vigour of libertarian think tanks there. But New Zealand, while inheriting many attitudes to property that come out of the same Anglo-American common law stable, has placed few constitutional constraints on the power of governments to commandeer resources – either by way of tax or abridgement of property rights. Indeed, the opposite has applied with a long history of governmental activism. In such an environment, Hayekian scepticism has lacked the support needed to make it free-standing.

More influential – but still of North American origin – is public choice theory , an out-growth of political economy that applies with considerable inventiveness, theories of economic motivation and rationality to political and bureaucratic actors. Politicians gather votes and extract electoral rents subject to exactly the same maximising calculus used by economic agents. Again, it is an idea with considerable intuitive appeal, (most especially when applied to the machinations of the US Congress’ annual round of sharing round the budgetary pork). Whether all political motivation can be described in these terms and the extent to which this can be a basis for public policy is another matter. But it certainly featured prominently in the minds of policy trailblazers during the white heat of the market-liberal revolution in New Zealand.

Ideological liberalism

In short, where Hayekian thinking injected scepticism about the tractability of government action, public choice theory injected scepticism of political agency. What is unusual about the New Zealand experience is the extent to which these parallel scepticisms took root. In upton-on-line’s view they took on, in some quarters, an ideological colour that transformed them from useful analytical lenses into a priori fixed points. The result was, on the one hand, a tendency always to assume government failure regardless of the evidence and on the other a reflex cynicism about political motivation that became highly corrosive of trust in even the most abstinent politicians.

Upton-on-line’s hunch is that the strength of scepticism and cynicism he witnessed was anchored in a much more ideologically potent attachment to limitations on state power as the corollary of individually held rights. This would all be the subject of an interesting seminar. Here, upton-on-line confines himself to two observations:

 That the thorough-going nature of the scepticism described above contributed to a general corrosion in public confidence that politicians could ever hold to something which previous generations would have described as the ‘public interest’; and

 That the belief in government failure became so pervasive that over the 1984–1996 period, notwithstanding many areas of regulatory intervention, many citizens associated incumbent governments with wilful inaction in the face of policy failures.

The perception arose that there was an ideological rather than an empirical reluctance by governments to intervene. To this might be added a further observation: with the enthusiasm for more-market liberalism in palpable decline from the early ‘nineties onwards, the home for its most committed enthusiasts became ACT – a party that, not coincidentally, places far more emphasis on the rights-based critique of political association described above in respect of America. In short, it has become the repository for ideological liberalism.

What does this mean for the centre-right?

In upton-on-line’s view, the 5-10% of the electorate that ACT can muster is about as far as this constituency extends in New Zealand. It comes as much from old Labour as it does from old National. Now it might be argued that that’s quite a tidy way of setting about dividing up the votes in the MMP world. Provide a home for those who yearn for a more or less liberal/libertarian settlement and then leave a party like National free to apply a more conservative, instinctive embrace of the market order that limits redistribution and market interference according to political acceptability and a case by case examination of the facts.

The trouble with this, is that such an approach now covers the entire spectrum leftwards of ACT with the possible exception of the nearly extinct Anderton Party and the very extinct looking Alliance. In other words, National is now fighting to distinguish itself on broad economic issues from a very motley crowd all of whom, at the end of the day, are going to be constrained both electorally and by financial markets from putting up taxes and none of whom have much confidence in new state-led commercial ventures. (Upton-on-line accepts that the Kiwi Bank and the compulsory super fund amount to significant exceptions, the latter it must be said hungrily embraced by the funds managers who stand to benefit from it).

But that does not indicate a return to past straightjackets. Indeed, Labour could spike any tax guns left in National’s arsenal with a single devastating move: Michael Cullen may not have earned many friends by imposing a 39 cent personal income tax rate. Without jettisoning it, he would only have to increase the threshold at which it cuts in to, say, $120,000 (much less than a ministerial salary) to make a significant number of middle class voters very happy.

On the social front National can find more room for differentiation but its only obvious coalition partner, ACT, is seen to be ideologically opposed to state intervention with all the ammunition that provides to an incumbent government committed to guarantees of social security. It’s the old left/right debate only, unlike FPP days, the ideological thorn is alive, well and visibly poised to frighten the horses where in the past it was safely hidden inside the National caucus in the shape of people like Jack Luxton.

Upton-on-line’s provisional conclusion is that market differentiation as urged by Michael Bassett is not viable on traditional economic grounds. Being an anti-socialist party has lost a lot of its street cred and being positively libertarian has limited appeal.

Is there anything left in the brand?

The question remains whether National can salvage a constituency by thinking hard about what its brand means. In another age, the implicit claim to represent the national interest as against sectional or class interests was just about unbeatable. But in 2002 there are those who would argue, quite cogently, that in a world of simultaneous globalisation, regionalisation and localisation (with virtual communities being created without reference to any acknowledged geo-political boundaries), appeal to national interests is passé.

Upton-on-line is distinctly sceptical about this view. Even if it is true in Belgium or Denmark, Puerto Rico or Indonesia, there is an insular unity about New Zealand. We’re all in the same canoe and there aren’t any others nearby (indeed we’re more like an outrigger that’s been progressively breaking loose). New Zealanders will either get on with one another or fight one another: there is no larger comfort blanket under which to diffuse the tensions.

It is here that upton-on-line can see two possibilities that require any government to articulate a ‘national’ as distinct from an ideological or sectional interest: one concerns the basis of our constitutional arrangements (for which read the Treaty and the basis on which New Zealanders live in their own country and welcome newcomers). The other is our relationship with the rest of the world (which in the first place means Australia). Both issues remain muddy, poorly understood by most parliamentarians (let alone voters) and both have the potential, wrongly handled, to wreck New Zealand on reefs of unrest and growing isolation (respectively).

On the first issue, National has a chance to reject roundly Winston Peters’ xenophobia (which is balanced by the view of many that New Zealand needs more people, not fewer) while at the same time being responsibly receptive to the many worried people who see fashionable bi-culturalism as an inexorable road to divided sovereignty and internal conflict. On the second, a two-decade long deterioration in trans-Tasman relations is crying out for attention. But National – along with the entire political establishment – has done little foreign affairs homework in living memory (this year’s select committee report was a welcome exception). An opportunity exists but it can’t be taken without a lot of very hard homework over a period of years – homework that National has shown little stomach for.

Is there a conservative subtext?

Appeals to the national interest are, however mounted, contestable. If National needs an antidote to ideological liberalism – or merely a leavening agent – is there some species of conservatism lying around in some long forgotten philosophical cupboard somewhere? The British Conservative Party has not always hewn to a conservative line. In Disraeli’s time it was progressive, in Austin Chamberlain’s time imperialistic and in Thatcher’s time iconoclastically liberal. But there has throughout been a respect for the unplanned, organic institutions that breath civility and order into society (be they church, family or traditional modes of conduct). At times, this sense of both the resilience and the fragility of the human condition has achieved serious philosophical expression – witness the writings of someone like Oakeshott.

But there has been no presence in New Zealand academic or literary circles that has given resonance to these themes. If the National Party were to define itself as conservative it would face two problems. One would be a competitive one. ACT aside, all the other political players could argue that they were more or less ‘conservative’ – certainly there is plenty in Peters’ and Dunne’s voting records to support that; but so too can Helen Clark claim to be a conservative having pressed the pause button after the policy upheavals of one and a half decades. More acutely, National would be hard pressed to articulate what it was claiming to conserve. Some of its supporters still pine for the policy radicalism of the Douglas/Richardson era. Many are openly hostile to the most emotionally rooted force for conservatism in New Zealand society – protection of the physical environment.

One suspects that this path would, without a great deal of soul searching, yield little more than a thin gruel of priggish, social moralism. And there’s plenty of competition for that ground in the centre-right of the political spectrum.

It’s not the philosophy, stupid

The danger of the foregoing analysis is that it is a prescription for policy wonks. And that what counts in an intensely mediatised age is the attitude, personality and charisma of political leadership. After all, if we are living after the end of history and ideology has evaporated as a polarising force in political debate, there are only personalities left aren’t there? As readers of this newsletter will know, upton-on-line is deeply sceptical of this sort of analysis. But there is no doubting the importance of leadership qualities other things being (broadly) equal.

Colin James has provided the most penetrating analyses of political leaders in recent weeks and his assessment of Bill English has been especially intriguing. James has (unlike many of upton-on-line’s correspondents) recognised all along English’s intellectual calibre. (As readers will be aware, upton-on-line considers English to be the most able political mind he worked with in the last decade). But it carries a downside. Here are some excerpts from James’ recent NZ Herald portrait:

“But subtle intellects often don’t make sharp opposition … and his intrigue with the broad sweep and the long view has given Mr English a serious political disability: he sees all sides of an argument ...

“It doesn’t help Mr English that he sometimes laces his asides with irony, which a listener can miss and thereby mistake his meaning …

“Mr English does not flash cold steel. People do not see the affable fellow through a screen of power. He is ‘one of us’, oozes likeability, a laid-back lizard on a sunny rock.”

That laid-back quality is deceptive as James identifies:

“Journalists trailing him on the campaign have marvelled he has kept calm and chipper as the polls have dived. That is because he is deeply and securely centred …[h]is inner security makes him tough. He can ride out storms that would flatten a less well brought-up lad. Yes, he can lose his rag. But he does not lose his balance.

“Yet he is judged weak. He is not.”

English must find this sort of surgical dissection of his persona excruciating. But he is lucky that someone has attempted it for him. He has now only to prove it.

In upton-on-line’s view he is the only person at the present time who has the qualities and experience to stage a comeback for National. He has only been in the job 9 months, he has generated no strong negatives and has the serenity needed to cope with the trauma – and jump back into the fray. And in the past, a stellar personal performance would have been all that was required to claw back the lost ground. But it is no longer solely within English’s control, something National supporters are finding so hard to come to grips with in the MMP environment.

A traffic jam in the right hand lane

Which takes us back to Michael Bassett’s analysis of the chilling effect of MMP on broad church parties. Having lost its hegemony over the one third of the electorate that National used to consider its irreducible minimum, it is hard to see how it can effectively regain a controlling interest from such a minority position. How bleak its prospects are depends in large part on Peter Dunne’s performance. If the United Future party fails to gain traction, a sure-footed performance by English could yet claw back to that 30-ish% ledge. If it doesn’t, things are much more problematic – not just for National but for the entire centre-right. Four parties is just too many and even if Dunne decided to be a stable partner with Labour, plausible molecular bonds between the remaining three parties are just not evident. The policy and personal chemistry on offer is just too reactive. The electorate will be very wary about giving a mandate to such a volatile political compound.

Commentators have been scrabbling back into the history books to investigate the demise of the conservatives in 1906 and the liberals in the 1930s. It is hard to draw parallels but by no means absurd. If there is an overly polarised traffic jam on the centre-right and every prospect of long-term hegemony by the social democratic centre-left, people are inevitably going to think about trying to simplify the field.

Clearly, as the overwhelming loser, National is not at this point in a position to invite either United Future or ACT to fold up their tents at the very moment they’ve re-gained electoral oxygen. NZ First will survive as long as Peters is around and that could be a very long time. Yet if National were to evaporate and allow its votes to find their way to United Future, ACT or whoever, there is no reason to believe that the centre-right would be any more potent. Indeed, the collapse of the largest and best-established party could well see many middle NZ voters flock to Labour as a familiar, steady vessel in a sea of lifeboats.

To some extent it comes back to the relative strength of the brands in a market that just doesn’t seem to be able to grow itself. As indicated above, upton-on-line still considers the National ‘brand’ has resonance on some of the big issues that will make or break New Zealand. And he doubts whether, if it were liquidated, the ACT brand would have significantly wider pulling power than it is presently able to demonstrate. Labour’s great success has been its ability to eliminate the hard left by a mixture of embrace and then rejection. There is no destructive, ideological conscience seen to be operating to the detriment of politically savvy government.

Applying that logic to the centre-right would indicate the merger of National and ACT, if necessary under a new banner, but more importantly in a way that removes the spectre of a submerged, radical agenda that is waiting to pounce. As Lailla Harre and the remnants of the old Alliance proved, ideologists are more concerned with ideology than with winning. One suspects that applies as much on the libertarian right as it does on the collectivist left. But if the centre right wants to be anything other than a makeshift government should Labour stumble, it has to be electable within the mainstream political culture of the country.

Controlling the commanding heights

Upton-on-line has watched with fascination the collapse of two multi-party coalitions here in Europe – the Netherlands’ Violet Coalition and France’s Gauche Plurielle. In both cases they were constructed on the ruins of fragmented and fractious parties of the right that had long dominated their national politics. There are no safe parallels to be drawn, but it does seem that an electorate will tolerate multi-party government as long as times are good and the shenanigans are kept under control. Those are two variables which are just about impossible to engineer for very long. You can’t hold the castle if everybody has left the watch to debate the roster.

And that is Clark’s overwhelming luxury. She has a big enough occupying force to control the terrain provided her management is even half-good (and it has frequently been better than that). Even if the world economy goes seriously sour, she can plausibly present her team as the guarantors of security in a troubled world. As it was, Labour’s ability to win the party vote even in safe National seats suggests National voters were in some cases voting Labour in the interests of perceived stability. (The corollary is that Labour’s core vote is significantly smaller than the 41% it received – one of the few silver linings in the clouds Bill English faces).

To pose a credible, serious challenge, the centre-right has not only to pray (as all Opposition’s secretly do) for difficult times for the Government: it has to re-group as a more plausible and resonant home for at least 45% of voters. That’s a very tall order – and it won’t be achieved with four rancorous parties each trying to prove that it should be claiming leadership of the pack.

Time for sober reflection

It is no time for anyone on the centre-right to be sentimental about what might have been. In the interests of a stable democracy with high quality opposition, some hard-thinking is needed and a good dose of humility all round – even from the putative ‘winners’. MMP has irrevocably changed the game. But the life and death issues for this small, isolated, developed but not so rich country with unique constitutional, demographic and foreign policy challenges, remain the same. And if they’re not mastered it won’t just be the gullies that are flooded.

The Result

Party 1999 2002 +/- %



NZ First


United Future



Some additional interesting facts:

In the Maori seats, Labour took 55% of the vote, NZ First still claimed 15% and the Greens 10%.

National only carried the party vote in 4 of the constituency seats it won.

NZ First hit 23% of the vote in the Bay of Plenty.

The combined centre-left parties (L, G, PC) collected 51% to the centre-right’s 47% (N, ACT, NZF, UF). (The other 2% of party votes being unclassifiable for ideological purposes!)

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